Overview
Amanda
Biggs
There have been calls for reform to the Australian health system
for a long time.[1]
The centrepiece of the 2010–11 Budget for health is the Rudd
Government’s response to an extensive consultation process on
the shape of this reform. This involved the commissioning of three
major reports, and extensive discussions with health care
providers, community and stakeholder groups, the public and other
levels of government.
The Budget sets out the new National Health and Hospitals
Network (NHHN), which will radically change the way that hospitals
are funded, and provides funding for a range of other significant
health initiatives. Some of these were announced earlier this year
at the Council of Australian Governments’ (COAG)
meeting.[2] Funding
is provided to: establish the infrastructure and institutions for
the NHHN, improve hospital services through the proposed Local
Hospital Networks (LHNs), develop new primary health care
organisations to coordinate services (to be known as Medicare
Locals), improve the management of diabetes, expand and support the
health workforce, build more GP super clinics and fund GP
infrastructure, increase some mental health services, implement
e-health initiatives, ensure sustainability of the Pharmaceutical
Benefits Scheme (PBS), take action on smoking and alcohol, develop
a more integrated aged care system, and fund the advertising of
these reforms. This Budget also includes funds for a number of
other measures, including partly restoring the Medicare rebate for
cataract surgery that was reduced last year.[3]
These funding commitments, along with those made earlier in the
year at COAG, provide a package totalling $7.3 billion over five
years.[4] Over the
forward estimates, expenditure on the health function is forecast
to grow by 9.3 per cent a year, significantly higher than growth
forecasts from recent budgets.[5] The Government is seeking to generate savings and
revenue to offset some of the costs, mainly by reducing the price
paid for subsidised medicines, increasing the tobacco excise, and
increasing the threshold for the medical expenses tax offset. It
will also continue to press for a means test on the private health
insurance rebate, a measure that has been rejected by the
Senate.[6]
While the health funding and reform commitments in the Budget
are significant, some argue that aged care, mental health,
Indigenous health and dental health have not received adequate
attention.[7] The
calls for greater investment in these sectors are likely to
continue into the future. Mental health in particular remains an
area of significant stakeholder concern. While some funding
announcements in the Budget have been welcomed, some in the health
sector have expressed considerable disappointment with the Budget
overall.[8] In
residential aged care, there remain concerns over the longer-term
viability of the sector, given funding gaps between the cost of
providing care and the available government subsidies.[9] Reforming the health
workforce to meet the challenges of current and future health needs
continues to be a challenge for policy makers and, while
alternative workforce options are being investigated, this Budget
appears to have favoured more traditional solutions.[10]
Nevertheless innovative approaches, such as the budget proposals
to manage patients with diabetes (and veterans with chronic
diseases) through fund-holding arrangements, signal a preparedness
to explore new models. However, changes are usually associated with
uncertainty and questions remain over whether such approaches will
deliver better care or create perverse incentives. Meanwhile, the
fate of some savings measures remain uncertain; the legislation
means-testing the private health insurance rebate remains
unsupported in the Senate, and expected savings from reforms to
pharmaceutical pricing arrangements may be difficult to fully
realise.[11]
Significant challenges also remain to realising the
Government’s ambitious reform agenda. How the proposed
independent LHNs and Medicare Locals will improve integration and
coordination at the local level is yet to be determined. Governance
arrangements need to be established, performance standards set,
information and data systems established, reporting protocols
agreed and, not least, goodwill established between stakeholders
and vested interests overcome. Furthermore, although Western
Australia will continue to be funded through the existing National
Healthcare Specific Purpose Payment arrangements, it will continue
to remain outside these arrangements as long as it is not a
signatory to the COAG agreement. A truly national reform program
therefore remains an elusive goal.
[1]. A Boxall, ‘Reforming
Australia’s health system, again’, Medical Journal
of Australia, vol. 192, no. 9, pp. 528–30, viewed 14 May
2010,
http://www.mja.com.au/public/issues/192_09_030510/box11121_fm.html
[2]. Council of Australian Governments,
Communiqué, 29th Meeting, 19–20
April 2010, viewed 18 May 2010,
http://www.coag.gov.au/coag_meeting_outcomes/2010-04-19/index.cfm?CFID=857440&CFTOKEN=68418241.
[3]. Unless otherwise indicated, the budget
figures are taken from: Australian Government, Budget measures:
budget paper no. 2: 2010–11, Commonwealth of Australia,
Canberra, 2010.
[4]. N Roxon (Minister for Health and Ageing),
Building a health and hospitals network for Australia’s
future, media release, Canberra, 11 May 2010, viewed 17 May
2010,
http://www.health.gov.au/internet/budget/publishing.nsf/Content/budget2010-hmedia01.htm
.
[5]. Australian Government, Budget strategy
and outlook: budget paper no. 1: 2010–11, Commonwealth
of Australia, Canberra, 2010, p. 6–18.
[6]. This measure remains stalled in the
Senate.
[7]. J Breusch, ‘Nursing homes press
funds case’, Australian Financial Review, 14 May
2010, p. 20, viewed 14 May 2010,
http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2FK8PW6%22
[8]. The Mental Health Council of Australia has
condemned the lack of funding in the Budget. See Mental Health
Council, Government wrong – this is not a good budget for
mental health, media release, 13 May 2010, viewed 17 May 2010,
http://www.mhca.org.au/newsmodule/view/id/279/src/@random48c0ae557f3fe/
[9]. These concerns are explored in more detail
in the brief by Rebecca de Boer, below.
[10]. For more detail, refer to the workforce brief by Dr
Rhonda Jolly, below.
[11]. For more detail, refer to the PBS and pharmacy brief
by Rebecca de Boer, below.